Sonic Automotive, Inc. Reports First Quarter Continuing Operations Earnings Up 10%

CHARLOTTE, N.C., May 1 /PRNewswire-FirstCall/ -- Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today reported that its 2007 first quarter earnings from continuing operations were $23.7 million, an increase of 10% from the $21.5 million earned in the first quarter of 2006. Diluted earnings per share from continuing operations was $0.52 for the quarter compared to $0.49 a year ago.

Total revenue for the first quarter of 2007 increased 3.6% with same store revenue up 2.2% over the prior year quarter. On a same store basis compared to the same quarter last year, new vehicle retail revenues were up 2.3%, used vehicle retail revenues were up 5.1%, fixed operations revenue was up 5.4% and finance and insurance revenues were up 6.3%. Luxury and import brands represented 83% of total revenues for the quarter.

B. Scott Smith, the Company's President said, "Our results this quarter reflect the continued execution of our key operating initiatives. Our same store sales growth in the higher-margin segments of our business demonstrate the effectiveness of our used vehicle merchandising program and our electronic F&I menu rollout along with our core strength in the parts and service business. In addition to these revenue improvements, we continue to focus on our expense structure and ended the quarter with SG&A as a percentage of gross profit at 77.4%, or a 90 basis improvement, compared to the same quarter last year. We remain comfortable with our 2007 continuing operations EPS target of $2.48 to $2.58 per diluted share."

Presentation materials for the Company's May 1, 2007 earnings conference call can be accessed on the Company's website at www.sonicautomotive.com by clicking on the "For Investors" tab and choosing "Webcasts & Presentations" on the left side of the monitor.

To access the live broadcast of the call over the Internet go to: www.ccbn.com or www.sonicautomotive.com

A live audio of the call will be accessible to the public at 11:00A.M. EST by calling (877) 791-3416. International callers dial (706) 643-0958. Callers should dial in approximately 10 minutes before the call begins. A conference call replay will be available one hour following the call for seven days and can be accessed by calling: 800-642-1687, Conference ID: 5333288, International callers dial (706) 645-9291.

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C., is one of the largest automotive retailers in the United States operating 175 franchises and 38 collision repair centers. Sonic can be reached on the Web at www.sonicautomotive.com.

Included herein are forward-looking statements, including statements pertaining to anticipated diluted earnings per share from continuing operations. There are many factors that affect management's views about future events and trends of the Company's business. These factors involve risk and uncertainties that could cause actual results or trends to differ materially from management's view, including without limitation, economic conditions, risks associated with acquisitions and the risk factors described in the Company's annual report on Form 10-K for the year ended December 31, 2006. The Company does not undertake any obligation to update forward-looking information.



                            Sonic Automotive, Inc.
                      Results of Operations (Unaudited)
      (in thousands, except per share, unit data and percentage amounts)

                                                     Three Months Ended
                                                03/31/2007         03/31/2006
    Revenues
       Retail new vehicles                      $1,075,551         $1,037,301
       Fleet vehicles                               88,971             86,485
       New vehicles                              1,164,522          1,123,786
       Used vehicles                               331,032            310,208
       Wholesale vehicles                          115,156            132,476
          Total vehicles                         1,610,710          1,566,470
       Parts, service and collision repair         294,852            273,728
       Finance, insurance and other                 48,846             45,879
          Total revenues                         1,954,408          1,886,077
    Total gross profit                             310,463            298,069
    SG&A expenses                                  240,288            233,451
    Depreciation                                     5,794              4,818
    Operating income                                64,381             59,800
    Interest expense, floor plan                    16,291             12,297
    Interest expense, other                          9,277             11,949
    Other (expense) / income                             6               (665)
    Income from continuing operations
     before taxes                                   38,819             34,889
    Income taxes                                    15,140             13,357
    Income from continuing operations               23,679             21,532
    Discontinued operations:
       Loss from operations and the sale
        of discontinued franchises                  (5,269)            (7,171)
       Income tax benefit                            1,581              2,721
       Loss from discontinued operations            (3,688)            (4,450)
    Net income                                     $19,991            $17,082

    Diluted:
       Weighted average common shares
        outstanding                                 47,938             46,205
       Earnings per share from continuing
        operations                                   $0.52              $0.49
       Loss per share from discontinued
        operations                                  ($0.08)            ($0.10)
       Earnings per share                            $0.44              $0.39

    Gross Margin Data (Continuing Operations):

       Retail new vehicles                             7.3%               7.6%
       Fleet vehicles                                  2.2%               3.2%
       Total new vehicles                              7.0%               7.3%
       Used vehicles                                  10.3%              10.8%
          Total vehicles                               7.2%               7.4%
       Parts, service and collision repair            49.6%              49.7%
       Finance, insurance and other                  100.0%             100.0%
          Overall gross margin                        15.9%              15.8%

    SG&A Expenses (Continuing Operations):

       Personnel                                  $136,105           $136,785
       Advertising                                  15,566             14,491
       Facility rent                                26,059             23,712
       Other                                        62,558             58,463
       Total                                      $240,288           $233,451

    Unit Data (Continuing Operations):

       New retail units                             32,143             31,700
       Fleet units                                   3,745              3,944
       New units                                    35,888             35,644
       Used units                                   17,008             16,144
          Total units retailed                      52,896             51,788
       Wholesale units                              12,861             13,377
       Average price per unit:
          New retail vehicles                       33,461             32,722
          Fleet vehicles                            23,757             21,928
          Total new vehicles                        32,449             31,528
          Used vehicles                             19,463             19,215
          Wholesale vehicles                         8,954              9,903

    Other Data:

       Same store revenue percentage
        changes:
          New retail                                   2.3%
          Fleet                                        0.4%
          New total                                    2.1%
          Used                                         5.1%
          Parts, service and collision repair          5.4%
          Finance, insurance and other                 6.3%
          Total                                        2.2%



    Balance Sheet Data:
                                                 3/31/2007 (1)      12/31/2006
    ASSETS
    Current Assets:
       Cash and cash equivalents                    $14,001            $12,696
       Receivables, net                             334,097            385,849
       Inventories                                1,069,693            991,984
       Assets held for sale                         152,340            160,571
       Construction in progress and land
        expected to be sold in
        sale-leaseback transactions                  32,294             26,198
       Other current assets                          41,825             35,834
          Total current assets                    1,644,250          1,613,132
    Property and Equipment, Net                     230,639            220,551
    Goodwill, Net                                 1,162,562          1,155,428
    Other Intangibles, Net                           97,770             94,136
    Other Assets                                     44,774             41,517
    TOTAL ASSETS                                 $3,179,995         $3,124,764

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities:
       Floor plan notes payable - trade            $245,163           $377,943
       Floor plan notes payable - non- trade        852,085            686,515
       Trade accounts payable                        71,063             68,016
       Accrued interest                              15,980             19,336
       Other accrued liabilities (1)                181,476            180,884
       Liabilities associated with
        assets held for sale - trade                 55,309             54,229
       Liabilities associated with
        assets held for sale - non-trade             38,908             42,063
       Current maturities of long-term debt           2,696              2,707
          Total current liabilities               1,462,680          1,431,693
    LONG-TERM DEBT                                  601,272            598,627
    OTHER LONG-TERM LIABILITIES (1)                  38,548             39,570
    DEFERRED INCOME TAXES                           149,918            151,034
    STOCKHOLDERS' EQUITY (1)                        927,577            903,840
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $3,179,995         $3,124,764

    Balance Sheet Ratios:
       Current Ratio (1)                               1.12               1.13
       Debt to Total Capital, Net of
        Cash (1)                                      38.9%              39.4%

    (1) - Excludes the impact of the adoption of FIN 48

SOURCE Sonic Automotive, Inc.